A directive by the Milimani Commercial Court ordering for fresh valuation of the Blue Bird Aviation Limited owned by feuding directors will lay bare all the suspected hidden transactions the aviation company had concealed including how a Sh1.08billion tax demand by the taxman was resolved and controversial registering of a consent in a case the aviation firm had filed against the Kenya Revenue Authority (KRA).
Adan Abid Yusuf who founded the airline in 1992 successfully quashed the report prepared by RSM (East Africa) Consulting Ltd, a firm that was picked in consultation with his former partners saying it did not present a true picture of the value of his shares in the company.
Yusuf had filed an application challenging the previous report tabled last year valuing his stake in the company at Sh320million.
Until their bitter fallout, Yusuf, a former miraa exporter to Somalia was the chairman.
Effectively, Commercial Court Judge Justice Njoki Mwangi set aside the contested report and directed the partners to jointly appoint a new valuer.
Besides Yusuf, his co-directors and friends turned rivals include; retired Kenya Air Force Colonel Hussein Ahmed Farah, Hussein Unshur Mohamed (former Kenya Air Force retired Major) and Abdikadir Adan (pilot).
Each held a 25 per cent stake in the company.
The court had ordered that Ahmed, Unshur, and Abdikadir should buy out Yusuf’s stake in Bluebird Aviation.
Justice Njoki said the valuation by RSM was opaque as it did not disclose the source of its information.
However, the judge directed that if the valuation will find that Yusuf’s stake is more than Sh320 million, Bluebird Aviation will top up the difference within seven days after the report is filed.
“The sum held in court shall be released to the applicant’s (Yusuf) advocate within seven days of the valuation report being filed in court, subject to the value that will be determined of the applicant’s shareholding in the fourth respondent (Bluebird Aviation).” The judge ruled.
The Judge concurred with Yusuf’s averments saying there was no transparency and independence in the preparation of the business valuation report, which was integral especially when a valuer is appointed by rivalling parties.
“The asset valuation report which was unsigned and unsealed at the time of issuance to the parties remains invalid. This leads to the only conclusion that the assets valuation report was for all intents and purposes, incompetent and has no value.” The judge said.
Before the rivalry and fight for control of the aviation firm kicked in perpetuated by internal wrangles, Yusuf said he approached his friends to start the firm to export miraa to Mogadishu.
The report was to value the aircraft, land, and buildings owned by the company, review the balance sheet and prepare a financial model incorporating historical performance over the preceding three years.
Upon conclusion, the report was prepared and shared with the parties, and the money was wired to the Judiciary account and Yusuf shares were transferred to Abdikadir.
However, Yusuf contested the report as speculative.
In return, he made requests to be supplied with the audited financial statements but his appeal was ignored.
Yusuf told the court that he was supplied with the report on December 6, 2021, but noticed that the audited financial reports for the financial years from 2017 to 2021 were not availed.
On his part, Unshur told the court that RSM conducted Bluebird’s valuation and submitted a report on December 6, 2021, out of the mutual agreement between them all.
He argued that the application by Yusuf had been overtaken by events as the court’s deputy registrar had already signed share transfer forms in his favour and submitted them to the Companies Registry to effect the changes.
He said the Sh320.92 million had already been deposited to the judiciary’s account at KCB, adding that Abdi is no longer a shareholder.